The Rise of Gig Workers

The Rise of Gig Workers

How the workforce is changing

The term ‘gig worker’ has rapidly grown in popularity and use in the marketplace. The term stems from what is known as a gig economy, where workers are hired as independent contractors or freelancers, instead of the traditional ways of working, where a worker will be a traditional employee in the form of a W-2.

Uber and Lyft are two organizations that highlight how the marketplace is adapting to new technologies and utilizing gig workers. Ridesharing apps allow workers to create their own schedules, work their own hours and provide a service that is in high demand. In 2018, Uber and Lyft recorded close to 4 billion rides each. On top of that, since Lyft’s inception in 2012, it only took 6 years for them to reach 1 billion rides. So, you can see that with the addition of new technologies, the connection between work and workers are steadily increasing.

But, with the addition of gig workers comes new challenges organizations might face. One example will be how to manage the cost of services for more specialized skills. There are several organizations that will be able to match the services of a gig worker, but since they have resources with unique skills, their services will be relatively more expensive. A number of companies have set internal goals of having a portion of their workforce (possibly 25%) come from independent contractors to keep their cost down and allow them to compete in a gig economy. With technology being the driving force behind organizational disruption, those that have limited investments in new technology might face the possibility of falling behind their competitors.

There is a great deal of flexibility that appeals to traditional employees to make the transition towards becoming a gig worker. On the flip side, there are the negatives, such as lack of provided benefits and other employee-related perks. But one of the biggest hurdles has been the ability to connect with gig opportunities. More specifically, the lack of a formal process for organizations to readily view an individual’s (independent contractor’s) skills and availability. As an example, LinkedIn has helped several independent contractors find work but, like most social platforms, the individual chooses how to portray their skills and experiences. So, how do you really know if you are getting the talent and skills you are looking for?

As you can see, technology and the gig worker are fundamentally changing how workers are finding their work and how employers are adapting to the new ways of providing a service. But there must be more reliable ways for employers to identify qualified talent, beyond a tool like LinkedIn.

Download our latest white paper where we discuss in more detail how gig workers are influencing the workforce and how the gig economy will be enabled by the Talent Blockchain.